GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This enemy has struck us, and they want to strike us again. And we'll give our folks the tools necessary to protect the country. That's our job.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

U.S. SENATOR JOHN MCCAIN, R-ARIZONA: We have the moral high ground because we adhere to the Geneva Conventions, and we're not like these other countries.

(END VIDEO CLIP)

BLITZER: The raging debate over how to conduct the war on terror. Is the Bush administration going too far? We'll ask the president's national security adviser, Stephen Hadley. Plus, two key U.S. senators on the armed services committee weigh in, Republican John Cornyn and Democrat Evan Bayh.

Then, are U.S. allies doing enough to help in the fight against terror? We'll ask Pakistan's foreign minister, Khurshid Kasuri.

A grim assessment on the military situation in western Iraq. Iraq's national security adviser, Mowaffak Al-Rubaie, speaks out about the violent insurgency and his country's next steps.

BLITZER: Uncertainty on the Israeli-Lebanese border. What will it take to keep the peace with Hezbollah? We have an exclusive Sunday interview with the Israeli foreign minister, Tzipi Livni.

Plus, billionaire businessman George Soros gave millions last election season to Democrats. Will he do the same again this year?

"Late Edition's" lineup begins right now.

It's 10 a.m. here in Chicago, 11 a.m. back in Washington, 8 a.m. in Los Angeles, 4 p.m. in London and 7 p.m. in Baghdad. Wherever you're watching from around the world, thanks very much for joining us for "Late Edition." We're standing by to speak with two foreign ministers, both Sunday exclusives, and two national security advisers. First, though, let's go to Fredricka Whitfield at the CNN Center in Atlanta for a quick check of what's in the news right now. Hi, Fred.

(NEWSBREAK)

BLITZER: Thanks very much, Fred. The Bush administration is facing strong opposition from Democrats and several Congressional Republicans over how terror suspects should be treated. It's a huge debate in Washington with enormous ramifications in the war on terror. And it comes at a time when the president is preparing to address the United Nations General Assembly on Tuesday.

Just a short while ago, I spoke with Stephen Hadley, President Bush's national security advisor.

(BEGIN VIDEOTAPE)

BLITZER: Stephen Hadley, thanks very much for joining us. The president has a major fight on his hands right now as far as the treatment of terror detainees are concerned. And it's not just a fight with Democrats but with some serious Republicans, including Senator John McCain, Senator John Warner, the chairman of the Armed Services Committee, and Lindsay Graham. Is there a compromise? Is the president ready to make concessions in order to work out a deal with these lawmakers?

STEPHEN HADLEY, NATIONAL SECURITY ADVISER: Wolf, let's be clear what's at stake here. What's at stake is a program run by the CIA for questioning some of the world's most dangerous terrorists, Abu Zubaydah, Khalid Sheikh Mohammed. This is a program that has gotten information that has saved American lives, disrupted attacks both here at home and on our men and women in the field.

And the issue, as the president put it before, the country, here on Friday, is this very important program going to go forward. If it is, we need to give clear guidance for the men and women who run it. We need to give clear congressional support, and we need to get on with it. So it's a very important issue. And the key question is, are we going to have this terribly important program for our national security or are we not? The president's clear, we need this program, needs to go forward.

BLITZER: Is the president ready to meet these senators halfway?

HADLEY: The way forward on this, I think, has to start with an agreement that we need this very important program. That's what the president has said is so critically important for the country. The second thing that we all need to agree on is that the men and women at the Central Intelligence Agency who run this program deserve clear legal standards and clear congressional support. But then the third thing I think is also clear, we need to find a way so that we can do this without changing or modifying what's called Common Article 3. That is what Senator McCain thinks is so important. And so the challenge before us in the days ahead is to find a way through language that meets all three of those requirements. I think it can be done.

BLITZER: All right, well let's listen to what Senator McCain said the other day because he had some powerful words. Listen to this.

(BEGIN VIDEO CLIP)

MCCAIN: We understand that Al Qaida will never observe it, but many of us are afraid there will be additional wars in the history of the United States.

(END OF VIDEO CLIP)

BLITZER: His fear is that if you reinterpret what's called Common Article 3 of the Geneva Conventions, other countries are going to do the same thing, and that could seriously endanger U.S. troops who could be held as POWs in future wars. Does he have a realistic fear?

HADLEY: Let's be clear what's involved here. The men and women in uniform, whether ours or in other nations, are not covered by this Common Article 3. They, if they're captured on the battlefield, have prisoner of war status, and they are subject to a different set of rules and protections.

What we're talking about here under so-called Common Article 3 is the standard of treatment that applies to terrorists who have been captured on the battlefield, people like Al Qaida. These are people who are so-called unlawful combatants. They don't wear uniforms, they hide among civilians and they have used what many would consider a war crime as their principal vehicle for achieving their ends, namely killing innocent civilians. So let's be candid the kinds of people we're talking about here. These are terrorists.

But that said, let me be clear, what we're saying is that the treatment that these individuals are subject to should be subject to the standards that we have adopted in terms of the McCain amendment or the detainee treatment act that was passed last December, and which sets the standard for treatment of detainees, Al Qaida detainees here at home or abroad. All we're saying is that that standard needs to be adopted to clarify the fact that the so-called Common Article 3 has very vague language, things like outrages on personal dignity, humiliating treatment, words that are not self-defining. And our men and women at the CIA are saying simply tell us what the standard is so we can be confident that we can meet the law.

BLITZER: Let me read what Common Article 3 says, and we're going to go through it point by point, and you tell me what has to be redefined. The following acts are and shall remain prohibited at any time. A) Violence to life and person, mutilation, cruel treatment and torture. B) Taking of hostages. C) Outrages of personal dignity, humiliating or degrading treatment. D) Sentences or executions without previous judgment by a regularly constituted court affording all guarantees which are recognized as indispensable by civilized peoples. Which article specifically do you say need, in your words, clarification?

HADLEY: C) Humiliating treatment and outrages upon personal dignity.

BLITZER: Outrages of personal dignity, humiliating and degrading treatment. In other words, are you saying that terror detainees -- that the U.S., the civilian interrogators at the CIA or other agencies should be able to engage in outrages of personal dignity, humiliating or degrading treatment of these suspects?

HADLEY: I'm saying that nobody knows what humiliating treatment is. What does it mean? And the concern is that these people are being asked to take on very tough assignments. They want to be clear as to what is required, and they want it to be interpreted by U.S. law, not by opinions of European courts or other courts.

They want it to be interpreted under U.S. law and they want things clarified now. So if they take action now in reliance on an understanding of what these terms mean, that understanding will not be changed at some future time by some future court. They want clarity now in order to go forward with this program.

BLITZER: The U.S. argument -- and then I'll read to you what former Secretary of State Colin Powell, himself a retired chairman of the Joint Chiefs of Staff, said in a letter to Senator McCain: "The world is beginning to doubt the moral basis of our fight against terrorism. To redefine Common Article 3 would add to those doubts. Furthermore, it would put our own troops at risk."

Once again, he's suggesting that if the U.S. redefines Common Article three, the C section of that, then other countries will do the same thing.

HADLEY: We're not redefining it, because nobody knows what it means. What we are doing is telling the men and women who will do this program that it means what the Detainee Treatment Act says, that it prohibits cruel, inhumane and degrading treatment.

That is a standard that has been interpreted under U.S. law. Lots of cases have applied it. And we know what it means. It gives clear guidance to the men and women in uniform, and at the CIA, who will do this questioning of detainees.

And let me make a very important point. The Department of Defense, including the Joint Chiefs of Staff, and the Central Intelligence Agency -- those are the agencies whose people are on the front line against the war on terror every day.

They support the clarification we are trying to achieve. Why? Because they also believe they owe their men and women clear, legal standards. And secondly, they know that it is so important for this program to go forward because the information obtained has not only prevented attacks here at home; it has also saved lives on the battlefield.

So these key departments, on behalf of the men and women in uniform and the Central Intelligence Agency, who are on the front lines every day on the war on terror -- they support the clarification that the president is seeking.

Lastly, let me just make the point that the president did. We are not redefining. We are taking what Congress has agreed as the standard and using it to clarify these vague terms.

And if other nations would adopt that standard, that would be progress. It would strengthen Common Article 3. It wouldn't weaken it.

BLITZER: The other point of contention, major point of contention, is that you'd want to be able to use evidence in convicting these terror detainees, evidence based on classified information, secret information that you're not even going to make available to these terror suspects or their lawyers.

The question is this: How can they defend themselves if they have no idea what the evidence against them is?

HADLEY: Wolf, with all due respect that's not quite our position.

The problem is, we do not, obviously, want to pass classified information to terrorists. And so the challenge is to be able to continue to prosecute and bring to justice terrorists, where a lot of the evidence is classified evidence.

It's a tension. And we've resolved it in the following way, that in order for classified evidence to be used without showing it to the defendant, the head of the military tribunal must make a determination that it would not deprive the defendant of a fair trial.

The information must be provided to his attorney, so the attorney would have access to the classified evidence. And where at all possible the accused will have a declassified summary of that information.

So it's a much more narrow exception to reflect the realities of, while a war is going on, having to bring to justice terrorists. Most people would simply hold these terrorists until the end of the war. We think it's important for them to be brought to justice.

But to do that in the context, when we're fighting the war on terror, requires an accommodation that respects the rights of the defendant for a fair trial but also ensures that we don't give classified information to the enemy. We think we've got a good approach...

BLITZER: I want to be precise on this, Mr. Hadley, that the attorneys representing these terror suspects will be given all of that classified information.

HADLEY: Yes, sir.

BLITZER: All right, unfortunately we've got to leave it right there. A lot more to talk about, but we'll have to do it on another occasion. Stephen Hadley is the president's national security adviser.

Thanks very much for joining us.

HADLEY: Nice to be with you.

(END VIDEOTAPE)

BLITZER: And this note: President Bush will address the United Nations on Tuesday. On Wednesday, I'll sit down with the president in New York for a special one-on-one interview. That interview will air Wednesday in "The Situation Room" on CNN.

Just ahead, can U.N. peacekeepers in Lebanon prevent another war between Israel and Hezbollah?

And why can't the U.S. and its allies find Osama bin Laden? Pakistan's foreign minister, standing by live, to weigh in. Stay with us. "Late Edition will continue right after this.

(COMMERCIAL BREAK)

BLITZER: It's been just over one month since the cease-fire between Israel and Hezbollah went into effect, after 34 days of intense fighting. Hundreds of people on both sides were killed.

Now there's a relative quiet along the border. But how long will that last?

Back in Washington, this week, I spoke with the Israeli foreign minister, Tzipi Livni, for this exclusive Sunday interview.

(BEGIN VIDEOTAPE)

BLITZER: Foreign Minister, thanks very much for joining us here on "Late Edition."

LIVNI: Thank you.

BLITZER: 1701, the U.N. Security Council resolution -- you're on your way, now, to the United Nations General Assembly. You'll be speaking there.

Is this resolution being fully implemented right now?

LIVNI: Not yet. This is only the beginning. We are now a few weeks after Resolution 1701 was adopted by the Security Council. We can see the signs that this is the beginning of implementation. The Lebanese army deploys to the south part of Lebanon, but not yet fully.

Plus, the international forces, effective forces, some forces come to replace Israel in terms of enforcing the arms embargo from the sea side.

But there are two problematic issue which are not being implemented. One is the release of the Israeli hostages. This is a very sensitive humanitarian issue -- in a way, an open wound for Israeli society.

BLITZER: The two Israeli soldiers.

LIVNI: Yes, the two -- well, this was the attack, the unprovoked attack to begin with, started with the kidnapping of these Israeli soldiers.

And the other issue which is not being implemented right now is the armed -- the enforcement of the arms embargo on the Lebanese- Syrian border.

BLITZER: All right, I want to get to both of those issues. There are still Israeli forces in South Lebanon.

LIVNI: Yes.

BLITZER: How many are there?

LIVNI: Well, there are some troops waiting for the international forces to come with the Lebanese army in order to replace them.

(CROSSTALK)

BLITZER: What do you estimate?

How much longer will it take before all Israeli forces are out of Lebanon?

LIVNI: It's not a matter of time, but a matter of performance. We are waiting for the Lebanese army to come with international forces. We want to give the keys to responsible adults, you know. We are not going to leave the south part of Lebanon to Hezbollah. This is not the reason for the operation, and these are the terms which are part of Resolution 1701.

BLITZER: Speaking of Hezbollah, the leader of Hezbollah, Hassan Nasrallah, said on Al Jazeera on Wednesday, "We are present on the border with Israel. There is no demilitarized zone south of the Litani River. Hezbollah is present south of the Litani and is present in all of south Lebanon." Is that true?

LIVNI: There are some Hezbollah members, Hezbollah militia members in the south part of Lebanon also, but the idea -- and this is part of Resolution 1701 -- was -- is to keep this as a free zone between the Litani River and the Israeli border, and at the end of the war, to dismantle Hezbollah. Now, I think that Nasrallah regretted already the attack on Israel. He said so, to the Lebanese people. He had to explain to the Lebanese people whether it was worthy (ph) or not, and I think that the answer is clear. So I just suggest to Hezbollah, if I may, right now, to work according to Resolution 1701, not for the benefit of Israel but for the benefit of the Lebanese people.

BLITZER: Your predecessor, Sylvan Shalom, foreign minister -- former foreign minister of Israel, was quoted in The Jerusalem Post on September 7th as saying this -- very strong words -- "The diplomatic results were not favorable to Israel. Israel did not achieve any of its declared war objectives: freeing Israel's kidnapped soldiers, disarming Hezbollah and removing all long-range and short mid-range missiles from Lebanon. Israel's exit strategy illustrated poor judgment, and it weakened the State of Israel."

Was the Israeli response to the kidnapping of those two Israeli soldiers, with hindsight, a mistake?

LIVNI: No. Israel had to respond. The idea that we're living in a neighborhood in which somebody like Nasrallah can attack Israel, an unprovoked attack, kidnap soldiers, kill others without any response, this would have been the wrong message. So the idea and the decisions that we took on July 12th was to attack back.

Now, let's compare the situation that Israel was and Lebanon was before the attack, or before the military operation, and let's see what is the situation right now, and let's make this compare. I mean...

BLITZER: Because, as you know, there is a lot of anger within Israel right now over the tactics, the strategy...

LIVNI: I know.

BLITZER: ... how this war unfolded.

LIVNI: I know that. I mean, I am a member of the Israeli government, and there are some demonstrations in Israel and some frustration. But I think that if we -- the Israeli public will stop, in a way, licking the wounds of the last month and see and look at the process, maybe from the outside we can see -- they will see the advantages of the process and -- can I compare because...

BLITZER: Please.

LIVNI: OK. So at the day before the attack, the Lebanese army was not in the south part of Lebanon, which was Hezbollah land. The Lebanese government couldn't reach an understanding or couldn't reach a resolution to deploy the forces to the south part. To transfer arms to Hezbollah was legitimate. There was no arm embargo. It was totally legitimate.

And the Iranians, plus the Syrians transferred weapon on a daily basis. And right now, what we can see is that the Lebanese army deploys, plus international forces. There is an arm embargo, even though it should be enforced fully and completely, and there is, as I said before, the two hostages, which any military operation couldn't bring them back.

BLITZER: So you're saying Israel won this war.

LIVNI: I say that the situation of Israel is better right now. And in terms of process, the military operation plus Resolution 1705 represents the interests of Israel, and brings us to a better situation.

BLITZER: Resolution 1701, you mean.

LIVNI: Yes.

BLITZER: Let me read to you what the former Israel Defense Forces chief of staff, Lieutenant General Moshe Ya'alon said...

LIVNI: I came to Washington in order to...

BLITZER: He was very, very forceful, and I just wanted to get your sense on the final days of the war...

LIVNI: OK.

BLITZER: ... very bitter words from a respected retired Israeli officer. "That was a spin move." He's referring to the offensive of the last few days that the Israelis launched. "It had no substantive security political goal, only a spin goal. It was meant to supply the missing victory picture. You don't do that. You don't send soldiers to carry out a futile mission after a political outcome has already been set. I consider that corrupt. That is why people have to resign. For that, you don't even need a commission of inquiry. Whoever made that decision has to assume responsibility and resign."

LIVNI: This is not true. And I'm not going to argue now somebody who was the former chief of staff, but I would like to say something because this is important, especially to the Israeli public. And maybe some of us have done mistakes during this operation, and we've had some discussions, and we had different ideas even during the operation. I'm talking about the cabinet, the Israeli cabinet.

But for sure, and even though I could agree with some of the decisions and disputed others, but the main goal was the safety of Israel. And the idea, or that we -- some of us were not thinking about the lives of the Israeli soldiers is more than nonsense. This is something which is not acceptable, and this is something which is against our values. And the fact is that the Israeli government -- and it's now going to be part of the future inquiry, but it was all with good faith. Even though maybe we made some mistakes during the operation.

(END VIDEOTAPE) BLITZER: And coming up, part two of my interview with the Israeli foreign minister, Tzipi Livni. I'll ask her how close she thinks Iran is right now to developing a nuclear weapon. You might be surprised by her answer.

But up next, a quick check of what's in the news right now, including the closing of the non-aligned nations summit in Cuba. Stay with us. We'll be right back.

BLITZER: The biggest criticism, internationally, was the destruction of so much of Lebanon's civilian infrastructure -- the roads, the airports, the ports, the environmental disaster along the Mediterranean coast of Lebanon.

Looking back, was that military attack justified?

LIVNI: You know, the first decision that the Israelis had to make was whether to attack Lebanon as such, as a state, or to attack Hezbollah. And Israel answered, because, from the international community, not to undermine the Siniora government.

And the fact is that we tried to attack Hezbollah, these terrorists, which were hiding and still are among the civilian population, which is a more complicated operation.

I mean, we could have ended this operation in days if we would have attacked Lebanon as a state, because it is more weak and it is less complicated.

So this was the decision that we made at the beginning.

Now, this infrastructure served not only civilians but also the terrorists. I mean, if we attack a road, from the north part of Lebanon to the south part of Lebanon, maybe it serves, also, civilians -- I'm sure that it does -- but it also served as a way, as a road to transfer weapons to the south part of Lebanon.

These were the instructions, the idea that the Israeli forces got from the cabinet. The idea was to hit infrastructure with dual use military and civilian.

BLITZER: We're almost out of time, but I want to get through a few quick issues, if you can.

As far as Syria is concerned, is there a possibility that you would be open to meeting with your Syrian counterpart, who is going to be at the United Nations also, and get this dialogue between Israel and Syria going? LIVNI: If Syria wants to be part of the international community, there are some conditions that they have to meet. And the first one is to stop embracing the terrorism.

I mean, it is not only about Lebanon and Hezbollah. They are hosting, in Damascus, also, the leaders, the most extreme leaders of Hamas, Khaled Mashal.

And the fact that the first abducted soldiers are not released yet is, unfortunately, partly is the role, the negative role of Syria, in supporting the extremists of Hamas. So I think...

BLITZER: So opening a dialogue, negotiations...

LIVNI: No, I think it's too early.

BLITZER: ... with Syria, which occurred in the past, is not going to happen?

LIVNI: I think it's too early to do it. There are some conditions that they have to meet.

BLITZER: How much time do you believe the international community has before Iran crosses into an area of no return, in effect has a nuclear bomb?

LIVNI: The crucial moment is not the day of the bomb. The crucial moment is the day in which Iran will master the enrichment, the knowledge of enrichment.

BLITZER: And how long is that?

LIVNI: A few months from now.

BLITZER: What does that mean, a few months?

LIVNI: A few months, I mean...

BLITZER: Six months?

LIVNI: No, I don't know for sure, because it takes time and this something that they have to try, in doing so...

BLITZER: Because other Israelis have said that would be the point of no return.

LIVNI: I don't want to use the words "point of no return," because the Iranians are using it against the international community. They are trying to send a message that it's too late; you can stop your attempts because it's too late.

It's not too late. They have a few more months. And it is crucial because this is in the interests of the international community. The world cannot afford a nuclear Iran. It's not only a threat to Israel. The recent understanding, also, of moderate Arab states is that Iran is a threat to the region. And I believe that this is time for sanctions.

BLITZER: Is this the biggest threat facing Israel?

LIVNI: Well, unfortunately, even though Israel was established about 60 years ago, it is still fighting for its existence.

And we just saw what the threats from Hezbollah, which is the long arm, the proxy of Iran in the region, and we have the Hamas and the terrorist organizations, and the global terrorism, and the Palestinians, and Iran.

So should I choose between the threats? I don't think so.

BLITZER: The president of the Palestinian Authority, Mahmoud Abbas, says he's ready for unconditional peace negotiations with the prime minister of Israel, Ehud Olmert. And the prime minister has responded positively to that.

Is there the possibility that Israeli-Palestinian negotiations are about to resume?

LIVNI: Israel made it clear, a few weeks ago, that we are willing to meet Abu Mazen, Mahmoud Abbas, but there are other open issues that the Palestinian government is to do. And this is to adapt to meet the requirements of the international community.

So Israel is willing to discuss with Mahmoud Abbas, the Israeli- Palestinian open issues, but yet there is a need for the Palestinian government to meet these requirements. And there is an open, very painful open issue, also, on this track, and this is the first abducted soldier, Gilad Shalit. And we hope that he will be released to his family soon.

BLITZER: The soldier who was kidnapped along the border with Gaza.

LIVNI: Yes.

BLITZER: Do you see any movement on the part of the Hamas government toward the conditions that Israel, the United States, the Europeans have set forward, that it should accept Israel's right to exist?

LIVNI: I don't think so, but I believe that the next few weeks are crucial. Because until now, and since the Hamas won the election, the international community was united in demanding the Hamas to meet these requirements.

And now, I think, we can see the first signs of demonstrations in the Palestinian streets against the Hamas government. And if the international community shows determination in the next few weeks, maybe this is the moment in which Abu Mazen can be strengthened and Hamas will have to do something about it.

Our idea -- and this also refers to your question about meetings with Abu Mazen -- is to strengthen Abu Mazen as the moderate side in the Palestinian Authority.

BLITZER: One final question: The last foreign minister of Israel who was a woman was Golda Meir. She went on to become the prime minister of Israel. You have a political future ahead of you. Do you see yourself someday as a potential prime minister of Israel?

LIVNI: I am trying to do my current job the best way I can, I know.

BLITZER: It sounds like you're open to that possibility.

LIVNI: As I said before, I believe in doing the best or acting the best in every position that I was until now, and it worked for me, and I hope that this can work for the state of Israel what I'm doing as a foreign minister.

BLITZER: Foreign Minister, thanks very much.

LIVNI: Thanks.

(END VIDEOTAPE)

BLITZER: And coming up next on "Late Edition," another foreign minister. Has the cease-fire between Pakistan made the fight for U.N. troops in Afghanistan more difficult? We'll talk about it with Pakistan's foreign minister, Khurshid Kasuri, when "Late Edition" continues. We'll be right back.

(COMMERCIAL BREAK)

BLITZER: Welcome back to "Late Edition." I'm Wolf Blitzer, reporting from Chicago today. Are U.S. allies doing enough in the search for Osama bin Laden and in the overall war on terror? Joining us now from New York, Pakistan's foreign minister, Khurshid Kasuri. Foreign Minister, welcome back to "Late Edition." Thank you very much for joining us.

Let's get right to this very sensitive issue of this deal, this truce that the Pakistani government has forged with pro-Taliban militias in North Waziristan, one of your provinces along the border with Afghanistan. A lot of Americans, as you know, are confused. They're concerned that you're easing up in trying to find Osama bin Laden, Al Qaida members, and the Taliban.

KHURSHID KASURI, PAKISTAN'S FOREIGN MINISTER: Well, Wolf, thank you for providing me the opportunity to be on your show and to respond to some of your questions. Nothing could be further from the truth. Pakistan's commitment to the war against extremism and terrorism is very much in place. President Musharraf is a strong leader. And I think the time has come where President Musharraf's leadership on this issue should not be questioned.

Now, you asked me -- I can understand why people are confused, but, you know, there's a time when not just brawn but brains are also needed. What are we doing? First of all, there's no question of withdrawing the army from those areas. What we are doing is, yes, redeployment is involved. And, you know, sometimes what happens when you have acts of violence, you end up alienating the local populations.

So the jerga, the sort of jerga that is tried in those areas, even in Afghanistan you have the loya jerga. The jerga involves involving all the tribal leaders. So what we've got is involved tribal leaders, and there's been long negotiations which are being conducted through the governor of the frontier province because these tribal agencies on the border between Pakistan and Afghanistan really never been completely tamed, as it were. Even when the British were there...

BLITZER: Well, let me interrupt, Foreign Minister, with respect, and read to you what one terrorism analyst, Peter Bergen, wrote in The Washington Post the other day. Because it's very biting, and it makes a serious allegation about your government: "The key to the resurgent Taliban can be summarized in one word, Pakistan. The Pakistani government has proved unwilling or incapable (or both) of clamping down on the religious militia, even though the headquarters of the Taliban and its key allies are in Pakistan. According to a U.S. military official, not one senior Taliban leader has been arrested or killed in Pakistan since 2001."

What's your reaction to that?

KASURI: Well, many have been arrested. Even last month, I think some were arrested. And furthermore, let me make it abundantly clear, there's very close cooperation between the Inter Services Intelligence of Pakistan and the CIA in the United States. They operate very closely. There's very close intelligence sharing.

It is inconceivable that if somebody like Mullah Omar or Osama bin Laden or Ayman al-Zawahiri, if their whereabouts were known, they would be only known to the Inter Services Intelligence of Pakistan and not to the CIA. And furthermore, when some of our friends in Afghanistan complain, we say to them, please give us actionable intelligence.

Actionable intelligence is always intelligence regarding the time and place. It's not six months after the event. And the CIA would know more than anybody else does. They are there in big force in Afghanistan. And, of course, as I said, we share intelligence with CIA. Pakistan currently shares intelligence with about 50 countries in the world.

And leading among those is United States CIA. It's inconceivable. I know the level of commitment the United States has. And how could it be that President Bush, Secretary of State Condoleezza Rice, General Abizaid, the sort of people who know about what they're talking, they are very grateful to Pakistan for the sort of cooperation that we are providing under very testing circumstances.

BLITZER: I think it's fair to say, Foreign Minister, that there is really high regard in Washington for the president of Pakistan, Pervez Musharraf. But there isn't such high regard necessarily for everyone else who works for him in the military and the security services.

I'll read to you from another article that appeared in The Washington Post recently. It said this: "A Muslim country where many consider bin Laden a hero, Pakistan has grown increasingly reluctant to help the U.S. search. The army lost its best source of intelligence in 2004, after it began raids inside the tribal areas. Pakistani and U.S. counterterrorism and military officials admit that Pakistan has now all but stopped looking for bin Laden."

I assume you saw that article, and I wonder if that's true.

KASURI: No, it is not true. And partly what I said in response to your first question holds for this one as well. Now, you see, bin Laden is not the sort of person -- I mean, he's not really somebody who can hide very easily.

Now, where is he? It's very tempting to say, as your, as the editorial or the articles suggests, because you have not been able to find him on the Afghan side. But where is he likely to be? He's likely to be largely where he has gotten accustomed to, where people know him.

Now, previously, fingers were pointed at Chitral. Chitral, they don't even speak Pashto, and they are not ethnic Pashtuns.

BLITZER: Chitral is part of Pakistan right now.

KASURI: Yes. Chitral is on the border.

BLITZER: But what you're...

KASURI: On the other side, there is Nuristan, which is a wooded area. And in fact, it is thought that Khitmatiar (ph), who is a former colleague during the Soviet Union's invasion of Afghanistan, colleague of Osama bin Laden, he is more likely to be there. But since nobody knows where he is, it is very unfair to indulge in finger-pointing of that nature.

BLITZER: But you're suggesting, therefore, that he's still in Afghanistan. Is that right?

KASURI: It is more likely because he would be among people where he can get support, and also in that part where they normally think he is, that part of Pakistan and Afghanistan, our part is less wooded. Theirs is more wooded. Our people don't speak Pashto in Chitral area, whereas on the other side, in Afghanistan, they do speak Pashto.

BLITZER: All right. Because the Afghans and a lot of U.S. experts think that he's probably someplace in Pakistan. And they also go further and say that Mullah Mohammed Omar, the former leader of the Taliban, is probably in Pakistan, in Quetta, right now. Is there information that you have that Mullah Mohammed Omar is in Pakistan?

KASURI: Well, it's absolutely essential to go into the history of this. You know, last year, there were accusations.

I do not wish to -- because we worked hard at improving our relations with Afghanistan. They are very good.

But I will have to, now, say that some of the leaders in Afghanistan said that he was seen in a mosque in Quetta. I mean, frankly, this is so outlandish.

And people from the American television and Western agencies went to that mosque. The mosque hardly existed. Now, why in hell (ph) would Mullah Omar expose himself in that manner?

And why should he not be among the people who love him or respect him or who have led him? And that is the Kandahar area. Why should he come to Pakistan, and particularly in Quetta, which is also Baluchi and Pashtun?

So therefore, it is unlikely that he would be there. And then, that is an urban area. Why should he go to urban areas when he can more easily hide himself in wooded areas or in caves?

BLITZER: We only have less than a minute left. But I want a quick question and answer, if possible, Mr. Foreign minister, on your summit yesterday between the leaders of Pakistan and India, both nuclear nations.

As you know, some Indians recently suggested that Pakistani groups were responsible for a series of horrible terror attacks inside India.

Give our viewers a sense of what, if anything, emerged from this summit yesterday between the prime minister of India and the president of Pakistan?

KASURI: Well, the meeting was very successful. And I say this not because I'm foreign minister of Pakistan. The prime minister of India, directly told me, himself, when I entered the room, because the president of Pakistan, the prime minister of India first had a one-to- one.

And the prime minister of India himself told me that it was a very good meeting. And the president of Pakistan also said so. Now, they have agreed on a lot of things.

They've said that the stalled peace process will start again, that they will address the issue of Kashmir in a purposeful manner. And Pakistan has, in turn, also agreed to a mechanism on terrorism because, even in the past -- and this is nothing new -- we have made offers to India to investigate acts of terrorism.

And this time, both the leaders have agreed on a mechanism regarding this scourge which is affecting both Pakistan and India.

BLITZER: Khurshid Kasuri is the foreign minister of Pakistan.

Mr. Minister, always good to have you here on "Late Edition."

KASURI: It's always a pleasure to be with you, Wolf. Thank you very much. BLITZER: Thank you.

And coming up, another deadly day of attacks in Iraq, especially in Kirkuk.

What will it take to secure Iraq? We'll ask two top U.S. senators, members of the Armed Services Committee.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

BLITZER (voice over): Roh Moo-hyun: What's his story?

The South Korean leader met with President Bush at the White House this week to discuss North Korea's nuclear program. Both countries want to return to the negotiating table, but North Korean leader Kim Jong Il has refused a new round of talks since November.

Despite humble beginnings in a small farming village, Roh had a successful career as a human rights lawyer before becoming a prominent politician.

He was elected president in 2002 with a mandate to clean up corruption in Korean politics. But his own administration has been plagued by scandal for violating election laws.

(END VIDEOTAPE)

BLITZER: And there's much more ahead on "Late Edition." How far is too far in the name of fighting terror?

Senators John Cornyn and Evan Bayh, standing by to weigh in, live, on the big debate this week: How should terror suspects be treated? we'll be right back.

(COMMERCIAL BREAK)

BLITZER: Let's take a close look at what's on the covers of this week's major news magazines here in the United States. Time Magazine looks at what war with Iran would look like and how to avoid it.

Newsweek features "The Next Generation: 20 Powerful Women on How to Take Charge."

And U.S. News and World Report focuses in on "Capitol Crime: How a New Washington Scandal Could Bring Congress to its Knees."

And this is "Late Edition," the last word in Sunday talk.

(BEGIN VIDEO CLIP)

BUSH: It is vital that our folks on the front line have the tools necessary to protect the American people.

(END VIDEO CLIP) (BEGIN VIDEO CLIP)

U.S. SENATOR JOSEPH BIDEN, D-DELAWARE: You don't make international laws to accommodate that extraordinary circumstance.

(END VIDEO CLIP)

BLITZER: A growing rift in the U.S. over how terror suspects should be treated. Hanging in the balance, the Geneva Convention. Is it time for a change? Two key U.S. senators on the U.S. Armed Services Committee debate, Republican John Cornyn and Democrat Evan Bayh.

A blood-drenched week in Iraq and a surge in deadly attacks. We'll get a status report on Iraq from that country's national security adviser, Mowaffak Al-Rubaie.

(BEGIN VIDEO CLIP)

GEORGE SOROS, BUSINESSMAN AND PHILANTHROPIST: The war on terror is a false and misleading metaphor. We have to fight terrorism, but war is the wrong way to do it.

(END VIDEO CLIP)

BLITZER: And a controversial book from billionaire businessman and philanthropist George Soros. He says the war on terror cannot be won.

Welcome back. We'll get to my interview with senators John Cornyn and Evan Bayh in just a moment. First, though, let's check in with CNN's Fredricka Whitfield for a quick check of what's in the news right now. Hi, Fred.

(NEWSBREAK)

BLITZER: Thanks very much, Fred. A huge issue in Washington this week has been how the United States detains and questions suspects in the war on terror. It's turning into a tug of war between President Bush and key members of the U.S. Senate Armed Services Committee, Democrats and Republicans.

Joining us now, two key members of that panel. From Austin, Texas, Senator John Cornyn. He's a Republican from the state of Texas. And in Washington, D.C., Senator Evan Bayh. He's a Democrat from the state of Indiana. Senators, thanks very much to both of you for joining us.

And Senator Bayh, I'll start with you. We heard in the first hour of "Late Edition" the president's national security adviser, Stephen Hadley, say that one article of this U.N. -- excuse me, of this Geneva Convention, what's called Common Article 3, needs clarification. And it needs it right now if civilian personnel are going to be able to interrogate effectively suspected terror suspects.

The element of "outrages of personal dignity, humiliating or degrading treatment," that needs clarification and definition. Is he right?

SEN. EVAN BAYH (D), INDIANA: He is right, Wolf, but we can accomplish that without gutting the Geneva Convention. And let me be clear about a couple of things first. Our principal concern is not about the detainees. Our concern is about U.S. military personnel and intelligence operatives who themselves might be subjected to torture and inhumane treatment someday.

We don't want to do anything to make that more likely, and don't want to do anything that undermines the moral standing of our country across the world in this fight against terror, because that is a great asset and strength of ours. We are morally superior to those we're fighting, and we don't want to confuse that issue. So, we can get the intelligence we need, Wolf.

BLITZER: But why are you suggesting, Senator...

BAYH: We can be true to the Geneva Convention, but we can do it by amending the War Crimes Act to give clarity to our agents so they can conduct these intelligence interrogations, get the information we need to protect our country but protect our own people and be true to our own values in the process.

BLITZER: All right. Well, let me let Senator Cornyn, himself a former judge, respond. What about that proposal from Senator Bayh?

SEN. JOHN CORNYN (R), TEXAS: Well, I'm glad to hear Senator Bayh talk about the importance of this program. We've gotten information from high-value detainees which have literally detected, disrupted and deterred terrorist attacks against our troops abroad and Americans here at home. And the issue really is, do we provide clear rules for our civilian interrogators so they know what is permitted and what is not permitted?

We thought we'd actually done that last year, and Senator McCain championed the passage of the Detainee Treatment Act, which by its name you can tell defined what American law said with regard to how detainees shut be treated. And then the United States Supreme Court came in in June and said Common Article 3 with this hopelessly ambiguous standard of outrages against personal dignity applied.

All we want to do is tie that standard to the Detainee Treatment Act, and I think we're done.

BLITZER: What he's suggesting -- Senator Bayh, I don't want to put words in your mouth, but explain what you meant, and then I'll let Senator Cornyn react, when you say what the president wants to do is effectively gut the Geneva Conventions.

BAYH: Well, that's what John McCain, Colin Powell, Lindsey Graham, John Warner, who is the chairman, as you know, Wolf, of the Armed Services Committee, former head of the Navy, they're all concerned that if we basically back away from the explicit requirements of the Geneva Convention, that will create confusion around the world about what standard that we adhered to. Then there's a separate question that John is speaking to, and I do think there needs to be some clarification here to give our operatives -- we don't want them sued. We don't want them prosecuted and brought into court and that kind of thing, so we do need to lay out very explicitly what they can and cannot do.

But we need to do that while still sending a clear message to the rest of the world that we adhere to the Geneva Convention because that is the accepted international norm. And if we back away from that, as I said, we endanger our own people, and we undermine our own moral standing, which is a great sense of strength for us.

BLITZER: All right. Senator Cornyn, I want you to listen to what your Republican colleague John McCain said earlier in the week on this very sensitive point.

(BEGIN VIDEO CLIP)

MCCAIN: Suppose that we amend the Geneva Conventions to our interpretation of it. Then another country that is not quite as democratic as ours decides they will amend their version. A Special Forces person is captured by them, and their attorney general tells their secret police, OK, here's our interpretation of Common Article 3 of the Geneva Conventions, have at him. That's what people are worried about.

(END VIDEO CLIP)

BLITZER: All right, Senator Cornyn, what do you say?

CORNYN: Well, first of all, the United States complies with the Geneva Conventions in their entirety, and we expect that chain of command will be honored and that the laws of war will be observed. But actually what Senator McCain is suggesting is something that I think the president is suggesting, and that is not to abrogate, not to amend the Geneva Convention Common Article 3, but rather to give it definition.

This is something that Congress does every time an international convention like the one banning torture that was ratified in 1994, that the Congress does as a matter of definition to make clear that the U.S. as a matter of sovereignty determines what's lawful and unlawful with regard to its activities, while adhering to these international conventions like Common Article 3.

BLITZER: Well, what do you think, Senator Cornyn, of Senator Bayh's proposal? He's got a different idea, a different method for clarifying that article as opposed to what the president would like. What do you think of his proposal to get around this impasse?

CORNYN: Well, I welcome it. I'm glad to hear what he said, and I think we need to get more people into this discussion so we can explore all the range of ideas. But I do think it's going to take more than amending the War Crimes Act because when the Department of Justice passes judgment on whether an interrogation technique is lawful or unlawful, they're going to look at the whole range of laws, not just the War Crimes Act, to determine that. That's why we need the clarity that would be provided by the Detainee Treatment Act.

BLITZER: Senator Bayh, the president had a bottom line, a short bottom line. He said that will force him to conclude whether any compromise with you and the U.S. Senate and the House of Representatives is possible. Here's how he put it the other day.

(BEGIN VIDEO CLIP)

BUSH: I asked General Casey today if you got what you need. He said, yeah, I got what I need.

(END VIDEO CLIP)

BLITZER: I apologize. That's not the right clip from the president. I'll read to you what the president basically said. He said, "The point is that the program is not going to go forward if our professionals do not have clarity in the law." That's his bottom line.

BAYH: By the way, Wolf, I suspect General Casey doesn't have what he needs either, but to get to your question, look, we need to keep this program. We do get valuable information from it, but we can do it in a way that uses methods that don't approach torture. And that's important for the reasons John and I and all of us appreciate: protecting our people, maintaining our moral standing.

And we need to do that while providing the clarity our people need. So, look, the president's threat, I think, frankly, is hollow because the program should stay in place. It can stay in place. And we can do it while protecting our country and our values and our people at the same time.

So let's look at the War Crimes Act. Let's look at the Detainee Act that John mentioned. Let's find that common ground. But look, the president shouldn't try and push something through that even members of his own party with deep national security experience like John McCain and Colin Powell think would undermine our standing, our security in the world.

BLITZER: General Powell, Senator Cornyn, wrote to Senator McCain this past week, and there was one very strong line in there. He said, "The world is beginning to doubt the moral basis of our fight against terrorism." A powerful assertion by a retired four-star general.

CORNYN: Well, General Powell is a great patriot. I actually think, when you read the first paragraph of that letter, he said he didn't want to water down the Detainee Treatment Act which we passed last year.

I actually think there's more basis for common ground and agreement between General Powell, the administration and Senator McCain than first meets the eye.

But clearly, we treat our detainees well. The fact is we would be happy if Al Qaida would treat any prisoners of war they take of ours -- but he don't take prisoners of war; they behead them. And they don't respect any international conventions, including the Geneva Conventions.

BLITZER: We're going to take a quick break, but a quick question, Senator Cornyn and a quick question to Senator Bayh: Can you reach a compromise deal between the president and the U.S. Congress in the next two weeks or so before the Congress goes into recess?

CORNYN: I certainly hope so. It's very important that we begin to try these detainees who have been kept for a long time and interrogated because they need to be held accountable for the war crimes they've committed.

BLITZER: Senator Bayh?

BAYH: I think we can, Wolf, and I hope we can. But, look, it's better that we get it right than we get it quick. There are no detainees in the CIA program anymore. They've all been shifted over to the military side. These people aren't going anywhere. They'll ultimately be tried.

We need to make sure we do it the right way.

BLITZER: Senators, stand by. We're going to continue this conversation. I'll also be asking them about the situation in Iraq and, potentially, the need for more U.S. troops to be dispatched there.

Also ahead: a capital in chaos. Iraq's national security adviser, Mowaffak al-Rubaie in Baghdad on why we saw another deadly week in the battle for the Iraqi capital. That conversation coming up.

And later, my conversation about money, politics and opposition to the war in Iraq with the billionaire George Soros. I'll ask him why he continues to make comparisons between President Bush's policies and Nazis.

We're continuing our conversation, now, with Senators John Cornyn and Evan Bayh, both members of the Armed Services Committee.

Senator Bayh, I want to button up the whole issue of terror detainees. In the first hour, we spoke with President Bush's national security adviser, Stephen Hadley.

He said, now, what the administration is ready to do, as far as making classified information, classified evidence available to terror detainees, is to make that classified information available to their lawyers and to try to clean it up to make a declassified version available to the actual terror detainees themselves. What do you make of this proposal?

BAYH: Well, I think that's a reasonable proposal to start from, Wolf.

Look, you can't try people and have any kind of process that is consistent with any notion of judgment without at least letting people know, who are accused of a crime, what the evidence is that supports the accusation.

But at the same time, we can't undermine our country's security by revealing national security information to accused terrorists. So an unclassified summary of the evidence, redacted documents that take out anything related to sources and methods -- that may give us some common ground we can work to get a reasonable compromise that, again, is true to our values but also protects this country.

BLITZER: Are you comfortable with this proposed compromise, Senator Cornyn?

CORNYN: Well, I think, if it were up to Senator Bayh and myself, we could work this out.

Unfortunately, other people are going to get to weigh in. But this is a very important issue because we know that, in past prosecutions, that classified evidence has made its way into Al Qaida's hands after the fact.

And we simply have to protect our sources and methods, as Senator Bayh says. And, obviously most of these detainees are not going to be particularly apologetic about their role in trying to take down the West and kill Americans and kill civilians. That's what they do. That's their ideology that is so problematic.

BLITZER: But Senator Cornyn, if a man, or a woman, for that matter, is potentially going to be sentenced to death based on evidence -- maybe that evidence comes from hearsay, comes from torture victims who have been tortured or whatever -- shouldn't that person have a right to see the evidence before being judged?

CORNYN: Well, let me be clear, Wolf. We don't torture our detainees. What we do is we can use aggressive interrogation techniques which might be different from our use criminal law standards...

BLITZER: Let me just point out, though, Senator Cornyn, other countries provide information to the United States that do use torture.

CORNYN: Well, it's certainly our policy not to do that. But the point is that I do believe these detainees can be treated -- excuse me -- tried using evidence that can be provided, if it's classified, to their lawyers and unclassified summaries provided to the detainees. I believe they can get a fair trial. If not, they can appeal that case and then have the judge determine based upon the ruling of the trial judge, the tribunal and whether or not fair standards were applied. BLITZER: And Senator Bayh, are you comfortable that the individual could be convicted of a crime based on evidence that that person doesn't know what it really is?

BAYH: Well, of course, you have to get to the question -- the word the lawyers use is probative value. You know, how reliable is the information? What does it mean?

And you've got to know some things about it, Wolf. But the question is, what can you learn about it without divulging national security secrets? You can't do that.

And so it's just going to have to be handled on a case-by-case basis. And perhaps -- you know, if you just can't reveal some things, then maybe you don't seek the death penalty; you seek life in prison.

It's just something you've got to handle on a case-by-case basis. But we've got to protect the nation's security. We've got to protect our values and not having people being tried when we don't tell them what the facts are.

BLITZER: Senator Cornyn, it's only about -- you want to add one point, Senator Cornyn?

CORNYN: Well, I agree with Senator Bayh. At this point, we're doing all this, prospectively, on the front end. I think what we're going to have to do is pass some reasonable rules; let trials go forward; and then have them reviewed on a case-by-case basis by the appellate courts, including the Supreme Court. And I think that would be the appropriate way to go.

How worried are you, Senator Cornyn, right now, that the Democrats could become the majority party in the House and maybe even in the Senate?

CORNYN: Well, I do believe the Republicans will retain the majority in the United States Senate. I appreciate those polls, but I think most people focus on the candidates, the choices they've been given.

And they'll make their individualized judgment based on how well the incumbent, if there is an incumbent, has performed, or the choice given to them based on these key issues, some of which we've been talking about today. So I think Republicans will do well.

BLITZER: The Republicans were encouraged somewhat, Senator Bayh, by this ABC News poll which asks which party is better able to handle Iraq. Forty-four percent said Republicans; 43 percent said Democrats. And on the question, which party would better handle terrorism, 48 percent said Republicans, 41 percent said Democrats. You see this election, the midterm election, from the Democratic perspective perhaps slipping away?

BAYH: No, I don't, Wolf. I think most people know that we can do better. We can do a better job of securing our nation's physical security. I mean, look, Iraq is not going as well as it should.

And when you have the vice president, who I take it spoke for the administration a week ago today, coming out and saying it they had to do it all over again they'd do the same thing, the same way, that's not only alarming, that's dangerous. We can do better than that.

Afghanistan is not heading in the right direction. That's the place from which we were attacked on 9/11. Iran, which is everything we thought Iraq was but wasn't, is not going well under this administration. Homeland security, we need to do more in ports and rail facilities. So the list goes on and on, Wolf.

We have to offer a program that is both tough and smart to show that we can do a better job of securing this country, and I think we can. I think most Americans will realize that and vote for a change.

BLITZER: We're going to be out of time in a second, Senator Bayh, but when are you going to announce your run for the presidency?

BAYH: Well, it's kind of you to ask, Wolf, but I hope I don't disappoint you by saying not today. Maybe a scoop on another Sunday.

BLITZER: All right, we'll be waiting. Senator Bayh, always good to have you on the program. Senator Cornyn, if you want to run for the presidency, we'd be anxious to hear that, as well. Thanks to both of you for joining us.

And this note to our viewers: President Bush addresses the United Nations on Tuesday. On Wednesday, I'll sit down with him in New York City for a special one-on-one interview. That interview will air Wednesday in "The Situation Room" on CNN.

And coming up next, is Iraq on the brink of civil war, and is Iran undermining or helping Iraq? We'll ask Iraq's national security adviser, Mowaffak Al-Rubaie. He's in Baghdad.

But up next, we'll get a quick check of what's in the news right now, including peaceful gatherings around the globe to try to bring attention to the crisis in Darfur. Stay with "Late Edition."

(BEGIN VIDEOTAPE) BLITZER: Mowaffak al-Rubaie, thanks very much for joining us once again on "Late Edition."

There has been this very, very disturbing trend developing in and around Baghdad, elsewhere in Iraq: A lot of bodies. People not just killed but horribly mutilated, tortured, killed execution-style. Explain to our viewers what's going on in Iraq.

MOWAFFAK AL-RUBAIE, IRAQI NATIONAL SECURITY ADVISER: Well, Wolf, let me put this in a wider perspective. There are a lot of good news in Iraq, which unfortunately has not been shown in the media. There is going to be a handover of the command of the fourth Iraqi division very, very soon. And also, there is going to be assuming of responsibility of security in Dhi Qar province down south.

The other thing is the Iraqi security forces, combined the army and the police, have reached to a level of 300,000 now. And the maximum number we were planning to go to is the 325,000 by the end of the year.

So we're nearly there. And a lot of them, they are fully trained, they are prepared very well, and there are good arms they're carrying.

The good news, as well, in Baghdad's security plan, which a lot of people have overlooked this, is that, although we have started this Baghdad security plan a few weeks ago, several weeks ago, there was no fierce fighting. And a lot of the neighborhood we went in, very peacefully.

We injected cash in the local economy; we created jobs in there; we've done cleaning of the street; we've done a lot of beautification of these neighborhoods and provided extra serviced like extra hours of electrical power and clean water and so on and so forth. So there are a lot of good news coming from the...

BLITZER: Let me interrupt for a moment, because I want to get to all those issues, especially the troop levels. But we see on television, we read about these scores of bodies showing up at the morgue in Baghdad, almost on a daily basis, mutilated, tortured, killed execution style.

Explain what's going on. Why are all these people being slaughtered?

AL-RUBAIE: There are three sources of these horrible crimes. Number one is the organized criminals basically trying to frighten people, the local people in Baghdad. And number two is the rogue elements of some of the militias taking on, basically, with a sectarian motivation, taking on the other sects, and the Shia killing Sunnis and Sunnis killing Shia. But these are rogue elements of these militias around Baghdad. And Al Qaida is using this in their tactics as well. Basically, they are trying to create a maximum psychological impact by showing these horrible crimes, decapitation, killing, execution-style killing, mysterious killing and mutilation. This is Al Qaida, using this tactic to drive to demoralize our Iraqi security forces and also to frighten the local people in Baghdad.

BLITZER: Dr. al-Rubaie, are you seriously thinking of building a trench around the entire Iraqi capital, around Baghdad, and limiting access to the Iraqi capital, at what, 28 checkpoints?

AL-RUBAIE: To be quite honest with you, this, what I call the physical barrier around Baghdad, is already there. It's the soil and it's the river; it's some trenches as well. It was already built during the old regime, around Baghdad.

And basically, we are making use of that to try to impede and impair the movement, basically, making the movement of terrorists coming from outside Baghdad to inside Baghdad, make it more difficult. That's what we are doing.

It's a physical barrier of water and soil is there -- and trenches. It's already there. We're basically putting a number of entry points to Baghdad and these checkpoints. And we're making more careful search during -- going in and out of Baghdad. And there are a certain number of entries in Baghdad that people are allowed to go into.

BLITZER: You went to Iran this past week with the prime minister, Nouri al-Maliki. You met with the president of Iran, Mahmoud Ahmadinejad.

As you know, the U.S. ambassador in Baghdad, Zalmay Khalilzad, has accused Iran of interfering and fomenting, if you will, the insurgency, the sectarian violence inside Iraq.

Did you get any assurances from the Iranian leadership that they would stop providing weapons, improvised explosive devices, support for the insurgents?

AL-RUBAIE: We made it absolutely crystal clear to the Iranians that we do not want any intervention in our internal affairs. And we promised them that we will respect their sovereignty and we expect them to respect our sovereignty and do not interfere in the internal affairs of Iraq.

And we also have good promises from the president, from the other officials, ministers, security ministers, that they will help in economy and services and in the security.

And I believe we've got very good reassurances from the Iranians that they will not interfere in the internal affairs of Iraq. And this is going to be a mutual respect to the sovereignty and independency of both countries to each other.

We wanted to make a good relationship with Iran on the basis of mutual and bilateral respect to each other.

BLITZER: Dr. al-Rubaie, I want to get back to what you said at the beginning, because we're almost out of time, that the Iraqi army, almost 300,000. What does that mean in terms of the U.S. presence, military presence in Iraq?

When will U.S. troops be able to start leaving?

Because as you know, in recent weeks, they have increased the level of U.S. military forces in Iraq.

AL-RUBAIE: It's a very simple formula. The more we get in number and preparedness and in the readiness of the Iraqi security forces, the less we need the American forces and American troops in Iraq.

And so we have a very clear idea, timetable if you like, for the Iraqi security forces' development, preparedness and readiness to assume battle state and to assume security responsibility in different provinces.

A delegation, going from tomorrow, from the National Security Council in Baghdad, going to Kurdistan, trying to negotiate a time for foreign troops to leave the Kurdistan, three provinces there -- we have time to leave Kurdistan, and for the Kurdish or Kurdistan regional forces to assume responsibility in the three provinces.

So we are gradually going about assuming more responsibilities in different provinces, up north, down south, and even in the middle, with growing number and readiness of our security forces.

BLITZER: Dr. al-Rubaie, as usual, thanks very much for joining us.

AL-RUBAIE: Thank you, Wolf, for having me.

BLITZER: And coming up next on "Late Edition," from Iraq to the war on terror, why the outspoken billionaire and philanthropist, the author George Soros thinks the terrorism fight has no end and no victory. Stay with "Late Edition."

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

BLITZER: Ann Richards, what's her story? The former Texas governor passed away Wednesday at her home in Austin, Texas, following a six-month battle with esophageal cancer. Richards achieved national attention in 1988 as the keynote speaker in the Democratic National Convention, saying that Republican presidential nominee George H.W. Bush was born with a silver foot in his mouth.

In 1991, she became just the second female Texas governor, a post she held until 1995. While in office she pushed for civil rights for women and minorities, calling for a new Texas. Richards is survived by her four children and eight grandchildren. Her funeral will be held tomorrow in Austin.

(END VIDEOTAPE)

BLITZER: And coming up next, why investor and author George Soros finds similarities between the Bush administration and the Nazis, what he calls the politics of fear. You're watching "Late Edition."

(COMMERCIAL BREAK)

BLITZER: Welcome back to "Late Edition." I'm Wolf Blitzer reporting from Chicago. Earlier this week, I spoke to investor and billionaire George Soros about terrorism, politics and the future.

(BEGIN VIDEOTAPE)

BLITZER: George Soros, thanks very much for coming in.

SOROS: A pleasure.

BLITZER: Let's talk about your new book, "The Age of Fallibility: Consequences of the War on Terror." I want to read to you a quote that sort of startled me, I'm sure a lot of your readers, once they read it: "The Bush administration and the Nazi and Communist regimes all engaged in the politics of fear. Indeed, the Bush administration has been able to improve on the technique used by the Nazi and Communist propaganda machines by drawing on the innovations of the advertising and marketing industries."

Now, when a lot of people hear comparisons between President Bush and Nazis and Communists, they're going to say, George Soros, you've gone over the top.

SOROS: You actually picked up the most incendiary part of the book. And I am very careful to draw a clear distinction between the Nazi regime and our open society, because we are a democracy, but there are some similarities in the propaganda method, which I pointed out.

BLITZER: But, George Soros, you lived through the Holocaust. You know firsthand what the Nazis were doing. You lived through the Cold War, the worst of the Stalinist era. To make comparisons between the president of the United States and these regimes, a lot of people are going to say, what are you thinking?

SOROS: Well, that is unfortunate because I think there are some serious arguments about our open society being endangered by the policies followed by the Bush administration. The war on terror, which does not have an end, changes -- it leads to an undue extension of executive powers. It has stifled debate. Criticizing the president is considered unpatriotic, and as a result, we have been following policies which endanger our position in the world. BLITZER: A lot of people will agree with you on that but where they will starkly disagree is to then bring in the whole Nazi and Communist comparison.

SOROS: Actually, it's a valid point, and maybe I did go over the line, but I think that on the whole, my assessment is a balanced one. And the fact that, frankly, when President Bush said, you are either with us or you are with the terrorists, that's when I was reminded, but I should have probably kept it to myself.

BLITZER: Because I'll read to you what you wrote in The Washington Post in 2003. You said, "When I hear Bush say, 'You're either with us or against us,' it reminds me of the Germans. My experiences under Nazi and Soviet rule have sensitized me. Bush feels that on September 11th he was anointed by God. He is leading the U.S. and the world toward a vicious circle of escalating violence."

That's what you said then. Now I guess you acknowledge you went over the top.

SOROS: Well, unfortunately, if you look at it five years later, we are, in fact, caught in a vicious circle of escalating violence. If you now look at it, we have been misled, and we are still caught in this metaphor of -- false metaphor of the war on terror. And that is a point that I really want to emphasize.

BLITZER: Because one of the themes of the book, "The Age of Fallibility," you sort of summarized in a recent article in The Wall Street Journal, which I read, you write this, and this raised some eyebrows, at least my eyebrows, as well: "The war on terror," you write, "cannot be won. An endless war waged against an unseen enemy is doing great damage to our power and prestige abroad. The world is in danger of sliding into a vicious circle of escalating violence. We can escape it only if we Americans repudiate the war on terror."

What are we supposed to do, just sort of give up and let the terrorists win?

SOROS: No, but when you fight the terrorists, you have to pick up off the terrorists and not wage war, which creates innocent victims, which fuels rage and resentment, which feeds right into the terrorists' cause. I mean, you know, Al Qaida and bin Laden did attack us, and we have to get rid of them. And we were right to go into Afghanistan because that's where he lived.

And if he had stuck to it, and if he had rebuilt Afghanistan as we could have, we would have gotten him. He would have no place to go, but we turned away. Instead of that, went into Iraq, which had nothing to do with 9/11.

BLITZER: But, so what I hear you saying is, the United States has to fight the war on terror. The United States can win the war on terror, but if it does it the right way.

SOROS: What I'm trying to say is that the war on terror is a false and misleading metaphor. We have to fight terrorism, but war is the wrong way to do it, and that is actually what I tried to explain. It creates innocent victims. It is an abstraction so that we can't distinguish between Al Qaida and Hamas and Hezbollah and the Sunni insurrection. It drives a gap between us and the terrorists so that we are the victims, they are the perpetrators, so that we don't realize that our actions have an effect on how people relate to it.

BLITZER: All right. Let me move on to some politics. Because a lot of our viewers will remember in 2004 you gave a lot of your own wealth -- and you're a very wealthy man -- what, between 25 and $30 million to try to defeat George Bush back in 2004. That, as we all know, failed.

Here's what you write in "The Age of Fallibility," your new book: "We cannot count on the Democrats, because they are afraid of being depicted as weak on defense. They will not be able to climb out of the box into which the Bush administration has put them without confronting the war on terror." Well, now you're talking about the war on terror, which a moment ago you were saying shouldn't be called the war on terror. But you seem to be losing confidence in the Democrats.

SOROS: Look, I'm afraid that Democrats have bought into the war on terror. The whole population, we, all of us, got caught in this false metaphor, which is a very powerful metaphor because we have, of course, to deal with terrorism, and what's more natural than waging war? But then turning a figure of speech into reality, we are now fighting real wars on a global scale.

BLITZER: Well, here's the bottom-line question: Are you going to give another 25, $30 million or more next time around, either in this midterm election contest or looking toward 2008 to try to beat the Republicans?

SOROS: I think it's very important that there should be a better balance, and I think it would be very healthy for our democracy if the House at least was in Democratic hands. But I'm much more interested in policy than I am in politics.

BLITZER: So what are we talking about? How much money are you looking forward to making available?

SOROS: Nothing like I did in '04 because that was an exceptional situation. I felt that if we could possibly remove President Bush from the White House, we would spare ourselves the terrible things that have happened since, the deterioration in our power and influence in the world and the increase in stability in the world.

BLITZER: You'll be a little less generous this time?

SOROS: Much more so.

BLITZER: Is there a Democratic candidate among any of the Democrats right now you like for 2008?

SOROS: I think it's too early. I think -- the election is in 2006. BLITZER: So you're not throwing your hat into anybody's ring right now?

SOROS: No.

BLITZER: George Soros, "The Age of Fallibility: Consequences of the War on Terror," thanks very much for coming in.

SOROS: My pleasure.

(END VIDEOTAPE)

BLITZER: And coming up next here on "Late Edition, in case you missed it, our Sunday morning talk-show roundup. Were interrogation techniques used on the war on terror? the main topic of the day.

And for our North American viewers, coming up at the top of the hour, "This Week at War" looks at Iraq, Afghanistan and the terror fight.

(COMMERCIAL BREAK)

BLITZER: And now, in case you missed it, let's check some of the highlights from the other Sunday morning talk shows here in the United States, all of them focused on the battle between the president and key Congressional leaders over controversial interrogation techniques used to combat terrorism.

(BEGIN VIDEO CLIP)

MCCAIN: There's two reasons why all these retired military guys, who are not soft on terror or Al Qaida, are coming down vehemently against modifying the Geneva Conventions. There's two reasons. One is the moral high ground. We are not like Al Qaida. We are not like the bad guys. We're the nation that people look up to. There's a war on the battlefield and a psychological or ideological struggle going on. And the second is, they are very worried about American military personnel falling into the hands of enemies who will, quote, "modify" or reinterpret the Geneva conventions to their liking.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

U.S. SENATOR GEORGE ALLEN, R-VIRGINIA: I do not want to stop these interrogations. I'm not for torture. I'm not for waterboarding. But some of these techniques have been very helpful to us, whether they are sleep deprivation or whether it's loud music, and I need to be absolutely certain that what the interrogations, interrogators are doing now, which is completely fine as far as I'm concerned, protecting Americans will not be harmed by the proposal.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP) U.S. SENATOR CARL LEVIN, D-MICHIGAN: We've got to stay with the position that protects American troops, that protects American values and avoids handing our enemy, the terrorists, the weapon which they want more than anything else probably, which is that America are hypocrites, that America mistreats prisoners. That plays into their hands. That's the propaganda tool that they want, and we should not hand it to them.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

U.S. REPRESENTATIVE JOHN BOEHNER, R-OHIO: I think these programs have helped protect the American people, helped uncover terrorist plots before they happened. And they're necessary programs, and we're willing to give the president the tools he needs to take on the terrorists. And many times, they stand in the way and try to fight giving the president these tools.

(END VIDEO CLIP)

BLITZER: Highlights from the other Sunday morning talk shows here on "Late Edition," the last word in Sunday talk. And that is your "Late Edition" for this Sunday, September 17th. Please be sure to join us next Sunday and every Sunday at 11 a.m. Eastern for the last word in Sunday talk.

I'm also in "The Situation Room" Monday through Friday 4 to 6 p.m. Eastern, for another hour at 7 p.m. Eastern. And this note, on Wednesday, my special one-on-one interview with President Bush. Until then, thanks very much for watching. I'm Wolf Blitzer in Chicago.

For our North American viewers, "This Week at War" is just ahead, right after a check of what's in the news right now.

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